Countries accelerate shift away from US dollar

[Stranagor]

Countries accelerate shift away from US dollar

The holdings of gold in the foreign exchange reserves of the central banks have been growing worldwide, hitting a 31-year high this year. At the same time, US dollar holdings have been dropping.

www.rt.com

The holdings of gold in the foreign exchange reserves of the central banks have been growing worldwide, hitting a 31-year high this year. At the same time, US dollar holdings have been dropping.

According to the World Gold Council, the banks have built up their stockpile by more than 4,500 tons over the past decade. As of September, the reserves totaled some 36,000 tons – the largest haul since 1990, and up 15% from a decade earlier.

At the same time, the presence of the dollar in foreign exchange reserves has dropped sharply over the past decade. In 2020, the currency-by-currency ratio of the greenback plunged to the lowest level in a quarter of a century.

Analysts say that the central banks, particularly in emerging economies, are continuing their shift to gold, reflecting global concerns about the dollar-based monetary regime. In the first nine months of 2021, Thailand bought some 90 tons, India 70, and Brazil 60.

Central banks and public institutions started boosting holdings of gold after the global financial crisis of 2008, which caused an outflow of funds from US government bonds, resulting in falls in the value of dollar-denominated assets.

Trust in dollar assets thus “faltered,” market analyst Itsuo Toyoshima says, as quoted by Nikkei Asia.

Gold prices have remained firm, trading at the $1,806 level per troy ounce as of December 30.

 

[Tshering22]

Countries accelerate shift away from US dollar

The holdings of gold in the foreign exchange reserves of the central banks have been growing worldwide, hitting a 31-year high this year. At the same time, US dollar holdings have been dropping.

www.rt.com

The holdings of gold in the foreign exchange reserves of the central banks have been growing worldwide, hitting a 31-year high this year. At the same time, US dollar holdings have been dropping.

According to the World Gold Council, the banks have built up their stockpile by more than 4,500 tons over the past decade. As of September, the reserves totaled some 36,000 tons – the largest haul since 1990, and up 15% from a decade earlier.

At the same time, the presence of the dollar in foreign exchange reserves has dropped sharply over the past decade. In 2020, the currency-by-currency ratio of the greenback plunged to the lowest level in a quarter of a century.

Analysts say that the central banks, particularly in emerging economies, are continuing their shift to gold, reflecting global concerns about the dollar-based monetary regime. In the first nine months of 2021, Thailand bought some 90 tons, India 70, and Brazil 60.

Central banks and public institutions started boosting holdings of gold after the global financial crisis of 2008, which caused an outflow of funds from US government bonds, resulting in falls in the value of dollar-denominated assets.

Trust in dollar assets thus “faltered,” market analyst Itsuo Toyoshima says, as quoted by Nikkei Asia.

Gold prices have remained firm, trading at the $1,806 level per troy ounce as of December 30.

Till the world continues to trade in the USD, nothing is going to change it.

The world needs a liquid currency to trade. Since there is no UN-designated standard trade currency, the USD takes the de facto position. And there is literally not a single country on this planet whose currency commands the liquidity, availability, and stability that the USD has.

Yuan, Ruble, Yen, Rupee, Franc, Shekel... nothing. Euros come a distant second but they are still not stable enough. One more exit by any other country and its value weakens drastically. Returning to the gold standard would be pretty difficult since gold is a finite resource. Something else will be required in the future. Something more sustainable.

 

[FairAndUnbiased]

Till the world continues to trade in the USD, nothing is going to change it.

The world needs a liquid currency to trade. Since there is no UN-designated standard trade currency, the USD takes the de facto position. And there is literally not a single country on this planet whose currency commands the liquidity, availability, and stability that the USD has.

Yuan, Ruble, Yen, Rupee, Franc, Shekel... nothing. Euros come a distant second but they are still not stable enough. One more exit by any other country and its value weakens drastically. Returning to the gold standard would be pretty difficult since gold is a finite resource. Something else will be required in the future. Something more sustainable.

India can continue using USD if it wants. It can continue allowing Indian economic decisions to be made in Washington DC instead of New Delhi. Has nothing to do with us. The question is, will Indians continue to tolerate this situation? How has it worked out for Indians?

 

[Polestar 2]

Till the world continues to trade in the USD, nothing is going to change it.

The world needs a liquid currency to trade. Since there is no UN-designated standard trade currency, the USD takes the de facto position. And there is literally not a single country on this planet whose currency commands the liquidity, availability, and stability that the USD has.

Yuan, Ruble, Yen, Rupee, Franc, Shekel... nothing. Euros come a distant second but they are still not stable enough. One more exit by any other country and its value weakens drastically. Returning to the gold standard would be pretty difficult since gold is a finite resource. Something else will be required in the future. Something more sustainable.

The world trade using USD to settle payment is getting smaller and smaller. This is the point. Its not about not using USD and reaches a point of zero in world trade. EU prefer to use Euro. China and Russia slash to more than 50% payment using yuan or rubble. Soon many ASEAN countries will accept RMB as payment. They can later used RMB to buy further Chinese products or settle for infrastructure payment.

India can continue using USD if it wants. It can continue allowing Indian economic decisions to be made in Washington DC instead of New Delhi. Has nothing to do with us. The question is, will Indians continue to tolerate this situation? How has it worked out for Indians?

Even India themselves realized the decline of USD. But their indian forumer are very ill informed.

Chinese Yuan a key focus for RBI's currency intervention

Indian rupee, Singaporean dollar and Chinese yuan are considered as three relative stable currencies for international investors.

economictimes.indiatimes.com

 

[Tshering22]

India can continue using USD if it wants. It can continue allowing Indian economic decisions to be made in Washington DC instead of New Delhi. Has nothing to do with us. The question is, will Indians continue to tolerate this situation? How has it worked out for Indians?

If you are ready to offer an alternative global currency, the world will be more than open to trading with it.

But as we all know from several discussions here, confidence in a global currency comes from a lot of factors. Until there is a commonly agreed currency, it will be difficult to shift away from the USD.

Bartering is a short-term measure but it will be chaotic to trade with the barter system if the value of goods is not denominated in a commonly-understood currency.

Even India themselves realized the decline of USD. But their indian forumer are very ill informed.

Chinese Yuan a key focus for RBI's currency intervention

Indian rupee, Singaporean dollar and Chinese yuan are considered as three relative stable currencies for international investors.

economictimes.indiatimes.com

You need to detach sentiments away when engaging in a discussion. I was talking about a common global currency.

Do you have a common currency to offer? Something that can convince the entire world trading system to move to? If yes, India will be the first one to shift away from USD.

 

[Stranagor]

Till the world continues to trade in the USD, nothing is going to change it.

The world needs a liquid currency to trade. Since there is no UN-designated standard trade currency, the USD takes the de facto position. And there is literally not a single country on this planet whose currency commands the liquidity, availability, and stability that the USD has.

Yuan, Ruble, Yen, Rupee, Franc, Shekel... nothing. Euros come a distant second but they are still not stable enough. One more exit by any other country and its value weakens drastically. Returning to the gold standard would be pretty difficult since gold is a finite resource. Something else will be required in the future. Something more sustainable.

I think it is not about completely doing away with the USD. After all, US foreign trade is well over 2 trillion USD.

It is more about balancing things out, so no single country would have the luxury of arbitrary sanctions or exporting inflation to maintain reckless spending and way of life at home at the cost of others.

India may continue with the USD until it turns green. In the end, it is a deficit-driven economy.

 

[Polestar 2]

If you are ready to offer an alternative global currency, the world will be more than open to trading with it.

But as we all know from several discussions here, confidence in a global currency comes from a lot of factors. Until there is a commonly agreed currency, it will be difficult to shift away from the USD.

Bartering is a short-term measure but it will be chaotic to trade with the barter system if the value of goods is not denominated in a commonly-understood currency.


You need to detach sentiments away when engaging in a discussion. I was talking about a common global currency.

Do you have a common currency to offer? Something that can convince the entire world trading system to move to? If yes, India will be the first one to shift away from USD.

Moving away from USD will weaken USA economic might, less expose vulnerable countries to US currency manipulation. If you want international currency to be RMB , it can be. Even your central bank are starting to take action as what I stated with my link.

Your logic is like neither used USD or not in world trade. But on ground reality, there is much more option available. Nobody forces you to pick these 2 choices only, there are still third of forth option. You want India economy to be at mercy of USD manipulation where you will see high inflation exported to India by US? Surely no....

 

[ARMalik]

Russia has completely got rid of US Dollar dependency. I am surprised why China continues to deal in US dollars. In fact, Chinese banks are overflowing with US Dollars.

 

[MH.Yang]

Russia has completely got rid of US Dollar dependency. I am surprised why China continues to deal in US dollars. In fact, Chinese banks are overflowing with US Dollars.

It's not difficult to destroy the dollar system, but we don't have another currency to replace it for the time being. Without the ability to rebuild the new system, we should not destroy the old system. The worst order is better than no order.

PS: China only needs to block ports for a year, and uncontrollable global inflation can destroy the dollar system.

 

[Hamartia Antidote]

China and Russia slash to more than 50% payment using yuan or rubble.

Why not switch to 100%? You should have been doing this 50 years ago..not today.
You guys think each other's currency is sh*t or something?
Why would you even be using a third party currency in the first place???

When do you ever hear of some EU to US or US to EU trade being done in Rubbles or Yuan??? How stupid does that sound?

 

[Stranagor]

It's not difficult to destroy the dollar system, but we don't have another currency to replace it for the time being. Without the ability to rebuild the new system, we should not destroy the old system. The worst order is better than no order.

PS: China only needs to block ports for a year, and uncontrollable global inflation can destroy the dollar system.

I think reserve currency comes with certain negative externalities, such as chronic trade deficit. That does not fit into China's development pattern. As you say, a new model is required along with the new realities before the old model is discarded.

 

[Viet]

Till the world continues to trade in the USD, nothing is going to change it.

The world needs a liquid currency to trade. Since there is no UN-designated standard trade currency, the USD takes the de facto position. And there is literally not a single country on this planet whose currency commands the liquidity, availability, and stability that the USD has.

Yuan, Ruble, Yen, Rupee, Franc, Shekel... nothing. Euros come a distant second but they are still not stable enough. One more exit by any other country and its value weakens drastically. Returning to the gold standard would be pretty difficult since gold is a finite resource. Something else will be required in the future. Something more sustainable.

The euros not stable?
The euro is second after the dollar.
The trading euro:dollar is $600 billion per day.

It's not difficult to destroy the dollar system, but we don't have another currency to replace it for the time being. Without the ability to rebuild the new system, we should not destroy the old system. The worst order is better than no order.

PS: China only needs to block ports for a year, and uncontrollable global inflation can destroy the dollar system.

China blocking ports?
Not funny as new year joke.

 

[Stranagor]

The euros not stable?
The euro is second after the dollar.
The trading euro:dollar is $600 billion per day.

China blocking ports?
Not funny as new year joke.

Why do you think China would ever go lenghts to make you smile? Some good policies are like bitter pills. If yourself found one, you would not dare it. But, if a doctor prescribed, you would swallow. China is your doctor.

 

[Polestar 2]

Why not switch to 100%? You should have been doing this 50 years ago..not today.
You guys think each other's currency is sh*t or something?
Why would you even be using a third party currency in the first place???

When do you ever hear of some EU to US or US to EU trade being done in Rubbles or Yuan??? How stupid does that sound?

Stop avoiding the fact, USD prominent are getting smaller and smaller around the world. It can be 100%, Don't wish for something you hate to happened. Less use of USD is not good for US dollar domination. You know that. US economy is purely based on this dollar domination.

 

[MH.Yang]

The euros not stable?
The euro is second after the dollar.
The trading euro:dollar is $600 billion per day.

China blocking ports?
Not funny as new year joke.

Can't US inflation explain the problem? When China announced the energy crisis and imposed restrictions on factory capacity, how did inflation in the USA and the world perform? The USA can print money indefinitely, but we can keep these money from buying goods. Because of the resistance COVID epidemic, China blocked all ports for a year. Do you think it's impossible?